L4 


CM 
CO 


CD 


TRAFFIC  DEPARTMENT 

LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 
H  BETHLEHEM,    PA. 


JLt 


COPYRIGHT,    Ip22 

LEHIGH    AND    NEW    ENGLAND 

RAILROAD    COMPANY 

BETHLEHEM 


"The  first  charge  of  industrial  managers 
is  proper  plant  location.  This  factor  satis- 
factorily taken  care  of  ris  a  step  forward 
to  success." 

— VICTOR  V.  KELSEY,  in  Chemical  and 
Metallurgical  Engineering^  August  31, 
1921. 

"In  the  days  when  naive  chambers  of 
commerce  beat  brass  bands  about  the 
country  to  get  any  industry  whatever  to 
locate  in  a  city,  many  serious  mistakes  of 
production  location  economics  were 
made." 

— J.  GEORGE  FREDERICK,  in  Industrial 
Management,  September  i,  1921. 


LOCATING 
THE  FACTORY 


LOCATING  THE  FACTORY 


MANY  enterprises  are  handicapped 
by  being  poorly  located,  and  many 
other  enterprises  are  profiting  by 
being  well  located.  A  poor  location  often 
places  a  manufacturer  at  a  serious  disad- 
vantage as  regards  competition,  while  a  good 
location  gives  him  a  distinct  advantage  over 
his  competitors.  But  many  manufacturers 
do  not  realize  or  consider  the  great  influence 
exerted  by  location  on  the  success  of  an 
enterprise. 

The  increasing  costs  of  transportation, 
power,  labor,  and  other  factors,  however, 
have  focused  the  attention  of  an  increasing 
number  of  business  men  on  the  importance  of 
this  problem.  The  proprietors  of  many  well- 
established  plants  will  promote  their  success 


AND    IfEW    ENGLAND    RAILROAD    CO. 


by  re-locating  their  enterprise,  and  all  those 
who  are  planning  new  enterprises  should 
give  this  subject  detailed  study. 

The  United  States  Steel  Corporation  found 
it  profitable  to  build  a  whole  new  city,  but 
the  American  Rolling  Mill  Company  finds  it 
profitable  to  remain  where  it  is;  Henry  Ford 
advocates  that  factories  move  to  rural  towns, 
while  William  Miller  Booth  states  that  "The 
modern  American  city  is  the  nucleus  of  suc- 
cessful manufacturing."  These  seem  like 
conflicting  opinions,  but  if  we  will  examine 
the  basic  factors  that  should  govern  the 
locating  of  a  factory,  manufactory,  or  other 
enterprise,  we  will  see  that  selection  and 
decision  can  be  made  scientifically,  accurately 
and  safely. 

There  is  one  universal  yardstick  that  can 
be  used  by  all  industries  to  measure  the  worth 
any  location:  the  yardstick  of  Ultimate 

tqfits.  In  the  last  analysis  this  should  be  the 

fading  factor.  Yet  all  too  frequently  a 
ufacturer  is  swayed  by  relatively  unim- 

[6] 


LOCATING    THE    FACTORY 


portant  considerations,  considerations  of  the 
moment;  such  as,  bonuses,  free  sites  and  tax 
exemptions,  whose  effect  wear  off  and  leave 
him  stranded  high  and  dry  in  a  locality 
wholly  uneconomical  from  a  manufacturing 
and  distributing  point  of  view.  / 

Take  the  experience  of  certain  manufac- 
turers in  Minneapolis,  for  example.  In  1897 
Minneapolis  "bought"  20  industries  through 
free  sites,  bonuses  and  stock  subscriptions. 
Twenty  years  later,  only  one  of  the  original 
20  survived.  Minneapolis  is  an  excellent 
location  for  many  industries,  but  evidently 
it  is  also  a  poor  location  for  others. 

There  are  approximately  285  cities  in  the 
United  States,  each  with  a  population  of 
more  than  25,000.  Every  one  of  these  towns 
is  probably  a  good  location  for  one  or  more 
industries  and  the  very  best  location  for  at 
least  one.  The  sagacious  manufacturer  \yill 
uncover  that  one  location  which  is  best  for  him 
—and  locate  THERE. 

For  when  his  location  is  right 

[71 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 

conditions  being  equal)  a  manufacturer  is  in 
position  to  compete  for  the  total  available 
trade  on  equal  terms,  at  least,  with  his 
competitors.  But  if  his  location  is  wrong 
(other  conditions  being  equal)  he  is  handi- 
capped to  the  precise  extent  that  the  location 
handicaps  him.  A  wrong  decision  in  this 
respect,  therefore,  becomes  a  serious  matter, 
affecting  profits  and  dividends;  while  a  right 
decision  is  of  lasting,  cumulative,|importance 
and  value. 


[*'. 


LOCATING 
THE  FACTORY 


FACTORS  THAT  DETERMINE 
DIVIDENDS 


"The  subject  of  locating  industries  through-out 
this  broad  country,  probably  on  account  of  its 
ample  area,  has  received  less  constructive  attention 
than  most  other  industrial  problems."  .  .  ."It  may 
be  stated  that  the  most  profitable  location  for  a 
factory  is  where  the  cost  of  production  plus  the 
cost  of  distribution  is  at  a  minimum.  It  is  evident, 
then,  that  the  profits  of  any  particular  industry 
are  directly  related  to  the  choice  of  the  site." 

— H.  H.  McCANNA,   in   Industrial  Manage- 
ment, June  i,  1921. 


THE  activities  of  almost  all  business 
enterprises   may    be   classified   into 
four  divisions:  Financing,  Account- 
ing, Manufacture,  Distribution. 

Of  these  four,  Financing  and  Accounting 
are  influenced  but  little  by  the  location  of  a 

[9] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 


factory.  To  be  sure,  banking  facilities  and 
accounting  facilities  must  be  provided  by  the 
locality  and  by  the  design  of  the  plant,  but 
when  we  measure  the  value  of  a  location  by 
our  gauge,  Ultimate  Profits,  the  significance  of 
banking  and  accounting  facilities  as  an 
influence  that  should  determine  where  a 
factory  should  be  situated,  is  almost  negli- 
gible. In  considering  Financing  from  the 
viewpoint  of  raising  Capital  for  the  enterprise, 
J.  Russell  Smith,  Ph.  D.,  in  his  book,  The 
Elements  of  Industrial  Management,  says, 

"Capital  is  scarcely  worthy  of  discussion  as  a 
locating  factor,  because  of  its  mobility.  When  the 
other  factors  combine  to  make  a  prospect  of  profit, 
there  y  granted  politi:al  stability,  capital  will  goy 
whether  it  is  :o  build  a  huge  mill  and  town  in  the 
woods  of  Maine  for  the  manufacture  of  paper,  to 
dig  oil  wells  in  the  mosquito-ridden  swamps  on  the 
Gulf  of  Mexico,  or  to  aid  in  the  search  for  precious 
metal  in  the  frozen  reaches  of  the  upper  Yukon. " 

The  two  phases  of  industrial  activity  that  are 
affected  most  incisively  by  the  location  of  the 


10 


LOCATING    THE    FACTORY 


factory,  are  Manufacture  and  Distribution. 
/Economies  of  production  and  distribution  are 
usually  dependent  in  large  measure  on  the 
site  selected.  Thus  the  importance  of  having 
the  factory  correctly  situated  is  emphasized, 
for  production  and  marketing  are  the  two  major 
divisions  of  business  activity  that  bear  most 
directly  on  a  manufacturer's  profits. 

But  the  forces  that  make  for  low  manu- 
facturing costs  and  the  forces  that  make  for 
low  marketing  costs  are  often  not  in  harmony. 
For  instance,  power  may  be  "dirt  cheap,"  or 
raw  materials  plentiful,  at  a  point  so  far  from 
the  markets  for  the  article  manufactured  that 
its  price  at  the  markets  would  be  prohibitive. 
And  it  is  equally  true  that  all  the  forces 
that  promote  low  manufacturing  costs  may 
not  work  together;  neither  do  the  factors 
affecting  distribution  always  pull  in  the  same 
harness.  Raw  materials  may  be  abundant 
at  points  where  labor  is  wholly  absent,  and 
to  which  labor  cannot  be  induced  to  migrate; 
freight  rates  may  be  low  to  points  where  the 

[ii] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 


market  is  overcrowded,  but  high  to  markets 

practically  free  from  intensive  competition. 

,  So  it  is  evident  that  the  selection  of  the 

best  location  for  a  factory  cannot  be  based 

*  -wholly  on  factors  that  affect  either  Marketing 

facilities  or  Manufacturing  facilities  alone. 

The  effect  of  the  different  factors,  or  opposing 

>i/  forces,   must   be   weighed,   and  that  location 

selected  which  combines  the  greatest  number  of 

favorable  factors  in  the  greatest  extent. 

In  his  article  "Choosing  the  New  Plant 
Location"*  H.  H.  McCanna  of  the  E.  I. 
duPont  de  Nemours  Company  says, 

"There  are  certain  fundamental  factors  which 
enter  into  the  solution  of  every  plant  site.  It  is  the 
weighing  of  these  factors,  and  establishing  the 
relative  importance  of  each  that  assists  most  in 
drawing  scientific  conclusions  and  deciding  upon 
the  proper  location  of  the  plant.  The  main  factors 
may  be  classified  as  follows: 

J  "PRIMARY  FACTORS: — 

A — Markets — foreign,  domestic,  national  and  local. 
B — Raw  Materials — principal  and  secondary. 


ndustrial  Management,  June  i,  1921. 


[12] 


LOCATING    THE    FACTORY 


C — Transportation — rail,  water  and  motror  truck. 
D — Labor — male,  female;   skilled,  unskilled. 
E — Power — coal,  fuel  oil,  electric. 

"SECONDARY  FACTORS: — 

A — Climatic  requirements,  if  any. 

B — Public  utilities  required. 

C — Dependency  on  municipal  environment. 

D — Dependency  on  municipal  laws  or  ordinances. 

E — Advertising  value  of  plant. 

F — Financial  aids — capital,  bonus,  free  site.  t 

G — Disposal  of  plant  wastes. 

"In  outlining  the  above  factors  it  will  be  seen  that 
the  primary  ones  are  those  which  usually  enter 
most  prominently  into  the  production  and  distri- 
bution costs  of  the  product,  which  as  stated  previ- 
ously, are  kept  at  a  minimum  by  a  properly  selected 
site. 

"These  are  the  items  then  that  should  receive 
careful  and  thorough  study  and  should  be  weighed 
in  relation  to  each  other  for  any  particular  industry. 
It  is  understood,  of  course,  that  in  various  indus- 
tries, the  importance  of  these  factors  will  differ  and 
in  some  industries  some  of  the  secondary  factors 
will  assume  major  importance. 
"But  the  more  consideration  that  is  given  toward 
establishing  the  relative  value  of  these  factors, 
the  more  likely  it  is  that  the  proper  site  will  be  chosen.'' 


LOCATING 
THE  FACTORY 


THE  PRIMARY  FACTORS 


"All  other  things  being  equal,  an  industry  naturally 
locates  nlear  the  market  which  it  expects  to  serve; 
for,  commonly,  the  founding  of  an  industry  comes 
either  because  of  a  demand  from  a  market  or  from 
an  effort  to  create  such  a  demand." 

— DEXTER  S.  KIMBALL,  M.  E. 

A — MARKETS. — Generally  speaking,  the 
market  that  a  manufacturer  wants  to  reach, 
is  the  pivotal  consideration  that  should 
I  govern  his  choice  of  plant  location.  For 
unless  he  can  sell  his  goods,  he  can  realize  no 
profits/Normally,  it  would  be  unwise  for  the 
manufacturer  whose  goods  are  used  by  the 
sheep-herder  on  the  slopes  of  the  Rockies  to 
locate  in  the  heart  of  the  New  England  States; 
and  it  would  be  equally  difficult  to  reach  the 
Southern  cotton  fields  or  the  shoe  centers  of 


14. 


LOCATING   THE    FACTORY 


Lynn  or  Brockton,  Massachusetts,  from  a 
factory  on  the  Pacific  coast,  if  competitors' 
plants  were  located  closer  to  these  markets. 
If  the  product  is  one  that  appeals  to  the 
whole  rank  and  file  of  the  population  of  the 
United  States  and  the  manufacturer  does 
not,  or  cannot,  cover  the  entire  country, 
it  may  be  advisable  for  him  to  locate  in  or 
near  the  heart  of  one  of  our  most  thickly 
settled  districts.  But  if  the  product  appeals 
to  a  well  defined  class  of  people,  he  should 
consider  where  the  largest  number  of  this 
class  are  to  be  found. 

/From  a  geographical  standpoint,  many  of 
our  larger  markets  are  clearly  defined,  even 
though  political  boundaries  are  not  recog- 
nized in  the  world  of  production.  For  example, 
"The  Industrial  United  States  includes  the 
section  north  of  the  Ohio  River  and  the 
Mason  and  Dixon  Line,  and  efast  of  the  Miss- 
ississippi  River,  with  smaller  sections  like  the 
Birmingham  district  in  Alabama,  the  Pueblo 
district  in  Colorado,  and  Kansas  City  in  Kan- 


LEHIGIJ   AND    NEW    ENGLAND    RAILROAD    CO. 

sas  and  Missouri/'*  A  manufacturer  whose 

.product  is  used  by  other  manufacturers:  such 

'  ^  as,  lathes,  machine  tools,  or  heavy  machinery, 

should  probably  erect  his  plant  at  a  point 

[ x  convenient  to   one  or  more  of  these  great 

fhanufa  cturing  centers. 

Conditions    which   exist    in    the    business 
world  today  lay  stress  on  the  side  of  distri- 
bution; the  producer  must  go  to  his  market 
where   formerly  the   market   came    to   him. 
Usually,  then,  a  factory  should  be  located  at 
;  a    point    from    which    its    product    can    be 
shipped  with  equal  promptness  and  cheap- 
•   ness  to  each  of  its  principal  sales  centers. 


B — -RAW  MATERIALS. — Second  in  importance 
to  the  market  is  the  location  of  raw  materials. 
^If  a  market  is  accessible  and  all  other  things 
are  equal,  a  plant,  to  secure  its  greatest  advan- 
tages, will  always  find  it  desirable  to  locate 
Jiear  its  raw  materials.  Insofar  as  the  cost  of 

hn  C.  Duncan,  M.  S.,  Ph.  D.,  in  The  Principles  of  Industrial 

[16! 


LOCATING    THE    FACTORY 


raw  materials  is  concerned,  that  location  will 
be  the  best  that  will  make  the  total  resultant 
freight  charges  of  all  raw  materials  the, 


minimum. 


/This  is  why  paper  mills  are  found  near  the 
forests,  and  packing  houses  near  the  stock- 
raising  regions.  The  best  location  for  a  blast 
furnace  (given  a  market)  is  a  site  where  ore, 
coke  and  limestone  may  most  conveniently^ 
be  brought  together./In  the  manufacturie  df^ 
paving  brick,  it  has  been  estimated  that  the\ 
relative  weights  of  clay,  finished  product,  and 
coal  are  approximately  40,  30,  and  3.  In  a 
case  of  this  sort,  it  is  evident  that  proximity 
to  market   and   to  clay  beds  is  of  utmqst  / 
importance. 

The  raw  materials  used  by  some  manu- 
facturing plants  are  composed  largely,  or 
entirely,  of  the  finished  products  of  other  - 
plants.  This  is  true,  for  instance,  in  the 
production  of  fine  electrical  specialties.  But 
the  same  principles  govern  the  correct  loca- 
tion of  these  industries,  as  govern  the  correct 


,-Tr-r  "«        „  .,.,,,„„.,„. ' 

LJ[J[   UB  Wl  m'    IH)  IIU  Hl1 


LEHIGH    AND    NEW    ENGLAND    RAILROAD    CO. 

location  of  other  industries;  the  manufacturer 
should  locate  his  factory  as  conveniently  as 
practical,  to  the  source  of  his  raw  materials. 
The  location  of  the  actual  materials  used 
by  a  manufacturer  as  his  raw  materials  is 
always  an  important  consideration,  but  the 
fact  must  not  be  lost  sight  of  that  the  location 
selected  will,  in  many  cases,  be  a  compromise 
between  the  availability  of  raw  materials  and 
the  accessibility  of  markets.  A  correct  compro- 
mise, in  these  respects,  usually  results  when 
the  factor  of  Transportation  is  considered. 


C— TRANSPORTATION.— Transportation  usu- 
ally limits  the  size  of  a  manufacturer's  market 
more  than  any  other  one  factor/ For  except  in 
the  case  of  patented  articles,  such  as  novel- 
ties which  cannot  be  duplicated,  and  branded 
articles  so  widely  advertised  as  to  be  really 
specialties,  transportation  charges  wall-in  the 
area  that  a  manufacturer  can  profitably  reach. 
These  transportation  charges  are  the  row- 
freight  charges  on  both  raw  materials 

[i8J 


LOCATING   THE    FACTORY 


and  finished  product.  But  the  crux  of  the 
problem  of  transportation  usually  lies  in  the 
relative  costs  of  transportation  for  raw 
materials  and  for  finished  product;  i.  e.,  thex 
ratio  between  the  freight  rates  on  the  materials 
that  go  into_the  product  and  the  freight 
rates  on  the  product  to  the  points  where  it  is 
marketed.  The  ideal  location,  in  this  respect, 
is  where  these  combined  charges  will  be  lowest. 
7As  between  waterways  and  railways,  the> 
former  have  the  advantage  of  cheapness, 
whereas  the  latter  have  the  advantage  of 
greater  speed.  Frequently  the  part-rail  and 
part-water  route  is  the  most  economical. 
In  reaching  the  Pacific  coast,  for  example,  a 
manufacturer  situated  in  the  East  may  ship 
by  rail  to  an  Atlantic  seaport,  thence  through 
the  Panama  Canal  to  the  Pacific  port,  and  • 
frequently  undersell  his  Competitors  located 
in  Illinois  or  Wisconsin  who  are  forced  to  use_ 
an  all-rail  route. 

/A  manufacturer  who  is  situated  so  that  he 
can  make  or  receive  shipments  over  more  than 

[19] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 


one  railroad,  is  more  likely  to  receive  better 
service  and  enjoy  lower  freight  rates,  than  the 
manufacturer  so  situated  that  he  is  at  the 
mercy  of  one  railroad.  Thus,  a  manufacturer 
located  along  a  belt-line  railroad  which  taps 
the  trunk-line  railroads  entering  a  large  city, 
is  in  position  to  use  any  one  of  these  trunk- 
lines  for  any  of  his  shipments;  moreover 
transfer  charges  will  be  absorbed  in  the  rates 
quoted  him  by  all  the  trunk-line  railroads- 

The  growth  of  many  of  the  "Industrial 
Districts  adjacent  to  belt-line  or  connecting- 
line  railroads  in  cities  like  Chicago,  Kansas 
City,  Minneapolis  and  St,  Paul,  is  due 
largely  to  the  superior  transportation  facil- 
ities afforded  a  manufacturer  located  along 
side  of  such  a  belt-line  railroad. 

The  advantageous  effect  of  competition 
between  railroads  on  the  rates  a  manufac- 
and  the  service  he  enjoys,  is  well 
tkd  by  the  example  given  by  Edwin  J. 
^  Dv,Jn  his  book  Rat/way  Traffic* 


Alexander  Hamilton  Institute. 


[20 


7  A  PTT>P  V 


. .  .  "Boston  is  served  by  both  the  Boston  and 
Albany  and  the  Boston  and  Maine  Railroads.  The 
connection  between  the  two  roads  is  formed  by  the 
Grand  Junction  Branch  of  the  Boston  and  Albany, 
which  meets  the  Boston  and  Maine  at  Somerville. 
The  Grand  Junction  branch  terminates  at  East 
Boston,  where,  at  the  railroad  docks,  lie  many  of 
Boston's  oversea  lines. 

"Suppose  a  carload  of  export  freight  is  shipped 
from  Nashua,  a  point  reached  only  by  the  Boston 
and  Maine.  To  put  this  freight  on  shipboard  will 
cost  the  Boston  rate  plus  a  switching  charge  on  the 
Grand  Junction  branch  of  the  Boston  and  Albany, 
21-2  cents  per  hundred  pounds,  minimum  $5  per 
car.  The  $5  per  car  is  what  the  Boston  and  Albany 
charges  for  switching  the  car  to  its  docks;  the 
Boston  rate  is  the  Boston  and  Maine's  rightful 
compensation  for  hauling  the  car  from  Nashua. 
Only  the  Boston  and  Maine  reaches  Nashua,  and 
this  railroad  need  make  no  sacrifice  in  the  matter  of 
absorption  of  switching  charges,  in  order  to  get 
the  car  to  haul. 

"If  the  export  car  originated  at  Buffalo,  the  New 
York  Central  and  the  Boston  and  Albany  would 
of  course,  haul  it  to  the  Boston  and  Albany  docks 
for  the  flat  Boston  rate.  The  car  could  be  moved 
from  Buffalo  via  the  West  Shore  and  Boston  and 


[21] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 


Maine.  But  these  roads  could  manifestly  charge  no 
more  than  the  Boston  rate  from  Buffalo  to  the 
Boston  and  Albany  docks,  for  the  Boston  and 
Albany  and  the  New  York  Central  stand  ready  to 
haul  the  car  there  at  this  flat  rate.  Therefore,  the 
Boston  and  Maine  must  absorb  into  the  Buffalo- 
Boston  rate  the  switching  charge  which  the  Boston 
and  Albany  sees  fit  to  make  for  hauling  the  car 
to  the  docks  from  the  junction  at  East  Somerville. 
Now  the  Boston  and  Albany  does  not  care  to  en- 
courage the  route  via  the  Boston  and  Maine  of 
traffic  which  it  can  itself  carry,  so  on  the  competi- 
tive traffic  its  charges  for  switching  are  41-2  cents 
per  hundred  pounds,  minimum  $9  per  car.  The 
Boston  and  Maine  stands  willing  to  absorb  this 
charge  on  export  traffic. 

"That  is,  switching  charges  are  absorbed,  not 
added  to  the  rate,  in  the  case  of  competitive 
traffic,  and  they  are  not  absorbed  in  the  case  of 
local  or  non-competitive  traffic." 

In  addition,  it  must  be  remembered  that  the 
lanufacturer  located  at  Buffalo,  in  the  fore-, 

ing  instance,  would  have  open  to  him  a 
loice  of  more  than  one  gateway  for  his 
traffic.  He  might  ship  via  the  Great 


22 


LOCATING   THE    FACTORY 


Lakes  and  the  St.  Lawrence  River,  via 
Boston,  New  York,  Philadelphia  or  Balti- 
more. Thus  he  is  benefited  by  competition  on 
the  seas  as  well  as  on  land. 

It  is  obvious  that  the  factor  of  transpor- 
tation costs  has  a  big  bearing  on  the  Ultimate 
Profits  a  manufacturer  will  enjoy,  and  that 
there  are  many  phases  of  this  complicated 
problem  which  must  be  considered.  Although 
the  preceding  illustration  deals  with  ocean- 
bound  shipments,  the  same  principle  applies 
to  domestic  shipments,  and  affects  the  small 
shipper  just  as  much  as  the  large  shipper.  No 
manufacturer  should  decide  upon  a  location 
for  his  factory  until  he  has  very  carefully 
weighed  ALL  the  elements  of  transportation 
that  will  affect  him.  And  since  the  subject 
of  rates  is  an  intricate  orie,  most  manufac- 
turers will  profit  by  the  counsel  that  only  an 
expert  in  these  matters  can  give.  / 


D — LABOR — No    site    for    a   .factoj; 
desirable  one  unless  a  sufficient  supj 

[23] 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 


kind  of  labor  needed  by  the  industry  is  avail- 
able in  the  neighborhood  or  can  be  attracted 
to  the  locality;  otherwise  there  is  but  little 
assurance  of  success.  Perhaps  the  labor 
factor  has  caused  more  factories  to  re-locate 
than  any  other  one  consideration. 

But  in  those  industries  where  the  bulk  of 
the  labor  is  unskilled,  or  semi-skilled,  as  in 
smelting  plants  and  cement  plants,  the 
factors  of  Market,  Raw  Materials  and  Trans- 
portation will  predominate,  for  the  working 
population  can  be  moved  to  the  plant 
location  from  elsewhere.  There  are  industries 
in  which  the  worker  will  seek  the  enterprise, 
but  there  are  also  many  industries  where  the 
enterprise  must  seek  the  worker. 

When  the  latter  condition  obtains,  Labor 
becomes  an  important  factor  in  deciding 
where  a  plant  should  be  erected.  It  is  usually 
exceedingly  difficult  to  induce  skilled  labor 
to  migrate.  It  takes  time  to  build  up  an 
industrial  community  of  skilled  workers  and, 
is  a  rule,  skilled  workers  do  not  wish  to  leave 


LOCATING   THE    FACTORY 


their  environment  without  a  considerable 
increase  in  wages,  or  other  compensations.  On 
the  other  hand,  labor  conditions  are  so 
unsatisfactory  and  troublesome  in  many 
large  labor  centers  that  manufacturers  have 
moved  from  these  points  for  this  cause  alone. 
A  consideration  of  the  labor  factor  includes 
a  study  of  the  relative  merits  of  city,  country 
and  suburban  locations,  for  a  given  industry. 
The  comparative  advantages  of  these  three 
is  admirably  summed-up  by  Hugo  Dimner  in 
Factory  Organization  and  Administration ,  as 

follows : 

'"As  between  city  and  country  sites,  the  city 
presents  the  most  flexible  labor  market.  Skilled 
labor  is  most  easily  obtained  on  short  notice  in  a 
city.  In  the  country  labor  is  cheaper,  and  the  work- 
men are  likely  to  be  more  contented.  They  are 
likely  to  marry  and  have  homes  in  pleasant 
surroundings,  and  the  inducements  for  the  wasting 
of  their  earnings  are  not  so  great  as  in  a  city.  At  the 
same  time,  in  dull  times  the  country  factory  is 
looked  to  as  bound  to  exercise  a  paternal  interest  \ 
in  the  employees  and  town,  — a  responsibility  from  i 
which  the  city  factory  is  relieved. 


LEHIGH    AND    NEW    ENGLAND    RAILROAD    CO. 


"A  suburban  site,  convenient  to  a  belt  line 
railway  such  as  exists  in  most  of  the  larger  trade 
centers,  presents  many  advantages  of  both  city  and 
country.  It  permits  the  purchase  of  sufficient 
ground  for  a  factory  site  to  allow  for  future  expan- 
sion. It  has  the  labor  market  of  the  city  to  draw 
from,  and  offers  the  workmen  who  choose  to  live 
close  at  hand  the  opportunity  of  pleasant  home 
sites." 

One  of  the  factors  that  induced  the  recent 
location  in  Huntington,  West  Virginia,  of  a 
large  new  Thermos  bottle  plant  was  the 
unbalanced  labor  situation  there,  between 
rriale  and  female  labor.  There  has  been  an 
abundance  of  labor  for  men  at  this  point — 
in  the  railway  car  shops,  etc. — but  the  women 
of  the  town  who  wanted  to  work  have  had  but 
little  opportunity.  This  phase  of  the  labor 
factor  is  an  important  one  for  many  manu- 
facturers to  consider,  both  in  regard  to  the 
employment  of  women  as  a  class,  or  other 
types  of  labor  as  a  class. 

Just  as  is  the  case  concerning  Markets,  Raw 
Materials  and  Transportation,  the  nature  of 

[26! 


LOCATING   THE    FACTORY 


the  industry  determines  the  degree  of  influence 
Labor  should  exert  on  site  selection.  But  it  is 
at  all  times  essential  that  sufficient  depend- 
able labor  be  at  hand  to  completely  satisfy 
the  requirements  of  the  enterprise. 


E — POWER. — Before  the  days  of  steam  and 
electricity  practically  all  industries  requiring 
power  necessarily  sought  water-power  when 
choosing  a  manufacturing  site.  And  even 
today,  water-power  is  usually  the  cheapest 
source  of  energy  that  a  plant  of  any  kind  can 
have.  In  some  industries  where  raw  materials 
and  water-power  are  found  in  close  proximity, 
and  the  transportation  costs  on  the  raw 
materials  are  greater  than  these  costs  for  the 
finished  product,  factories  using  these  raw 
materials  should  be  built  beside  a  waterfall  in 
the  region  where  the  raw  materials  are  found. 
But  the  use  of  coal  and  electricity  has 
greatly  modified  the  importance  of  water- 
power  as  a  source  of  energy.  Not  only  are  the 
waterfalls  frequently  too  small  to  allow  for 


LEHIGH   AND    NEW    ENGLAND    RAILROAD    CO. 

growth,  but  their  location  is  far  from  the 
markets  for  the  product.  New  England  got 
its  start  in  manufacturing  because  of  its 
abundant  water-power,  but  at  the  present 
time  large  parts  of  the  manufacturing  districts 
of  New  England  have  outgrown  their  puny 
waterfalls  and  are  dependent  on  coal  imported 
from  Pennsylvania  and  West  Virginia. 

For  most  industries,  the  fuel  bill  is  a 
relatively  small  item  in  the  costs  of  manufac- 
ture, which  superiority  of  efficiency  in  labor 
or  manufacturing  methods  easily  offsets. 
Of  course,  inexpensive  power,  whether  coal, 
electricity,  fuel  oil  or  water-power,  is  always 
a  factor  to  be  carefully  considered  in  selecting 
a  factory  site.  But  this  factor,  like  each  of  the 
preceding  factors,  must  always  be  considered 
in  relation  to  the  other  factors  which  may 
modify  its  importance. 

Seldom,  indeed,  does  it  happen  that  the 
existance  of  any  one  consideration  should 
determine  an  industrial  location.  The  manu- 
facturies  that  permanently  flourish  are  usually 


LOCATING   THE    FACTORY 


those  that  are  located  in  a  district  where 
they  can  count  the  greatest  number  of  desirable 
primary  factors. 

The  Waltham  watch,  however,  is  made  at 
Waltham,  Massachusetts,  primarily  because 
this  location  is  away  from  dust  and  soot.  This 
is  an  instance  where  a  Secondary  Factor  is  of 
primary  importance.  Not  infrequently,  for  ^ 
given  industry,  other  factors  enter  in,  which 
modify  or  limit  a  manufacturer's  choice  of 
sites. 


1        LOCATING 
THE  FACTORY 


THE  SECONDARY  FACTORS 


"I  knew  a  wise  man  who  had  it  for  a  by- word  when 
he  saw  men  hasten  to  a  conclusion:  'Stay  a  little, 
that  we  may  make  an  end  the  sooner/  " — BACON. 

IN  some  few  industries,  the  effect  of 
climate  is  highly  important,  but  in  most 
industries,  although  the  cost  of  heating  a 
factory  in  a  cold  climate  may  be  of  some 
importance,  the  climate  as  a  locating  influ- 
ence is  practically  negligible.  In  the  testile 
industries,  for  example,  climate  formerly 
had  considerable  influence,  but  now  such 
factories  are  kept  at  the  proper  degrees  of 
temperature  and  humidity  by  artificial  means. 
Of  course,  a  healthful,  invigorating  climate  is 
conducive  to  increased  production,  and  for 

[30! 


LOCATING    THE    FACTORY 


this  reason  a  site  where  such  a  climate  is 
found  may  be  desirable. 

The  public  utilities  supplied  by  a  district, 
the  municipal* environment  and  the  laws  of 
the  state  and  ordinances  of  the  town  or  city, 
should  always  be  looked  into  carefully  when 
choosing  a  factory  location.  It  is  important 
that  the  means  of  transportation  for  workers 
to  and  from  the  plant  be  considered,  for  this 
and  other  environments  of  the  factory  will 
have  bearing  on  the  contentment  of  labor. 

One  of  the  chief  objections  to  factory  sites 
in  rural  districts  is  the  difficulty  encountered 
in  according  skilled  workers,  accustomed  to 
the  conveniences  of  city  life,  similar  conven- 
iences in  the  country.  In  any  location,  the 
spirit  of  the  inhabitants,  the  local  laws,  and 
the  attitude  of  the  people  toward  the  enter- 
prise should  be  investigated.  "The  temper  of 
a  city  is  told  by  the  spirit  of  its  people.  No 
prospective  manufacturer  wants  to  try  to  do 
business  in  a  town  which  is  itself  antagonistic 
or  indifferent."  Of  course,  the  laws  relating  to 


LEHIGH    AND    NEW    EN&LAND    RAILROAD    CO. 

buildings,  construction,  sewage,  smoke,  noise, 
etc.,  and  the  water  supply,  fire  protection, 
sewage  facilities  and  similar  items  should  not 
be  overlooked. 

Usually  the  advertising  value  of  a  plant 
should  not  be  considered  at  all  in  choosing  a 
location.  This  is  a  field  wholly  removed  from 
the  usual  functions  that  devolve  upon  the 
factory  itself  and  except  in  very  unusual  cases, 
a  consideration  of  the  advertising  value  of  a 
site,  may  lead  to  false  conclusions.  The 
advertising  value  of  almost  any  site  is 
passive;  it  is  not  a  BIG  constructive  force. 
Advertising  funds  should  be  used  for  strictly 
advertising  purposes;  they  should  not  be  used 
to  purchase  property. 

The  dangers  arising  from  being  unduly 
influenced  by  offers  of  financial  aids  has 
already  been  pointed  out.  This  does  not  imply, 
of  course,  that  such  offers  are  at  all  times 
and  under  all  conditions  to  be  looked  at 
gkance.  Frequently  such  offers  are  made  in 
faith  and  if  accepted  will  prove  profit- 


LOCATING   THE    FACTORY 


able  to  the  manufacturer  and  to  the  locality 
offering  these  inducements.  But  they  must 
not  be  considered  as  FIRST  considerations; 
other  more  important  considerations  take  pre- 
cedence over  them.  This  is  shown  by  Charles 
W.  MacMullen,  president,  Clark,  MacMullen 
&  Riley,  Inc.,  Consulting  Engineers,  when  he 


says, 


"An  encouraging  feature  of  present  day  industrial 
development  is  the  increased  care  exercised  by  the 
manufacturer  when  selecting  a  location  for  his 
new  mill  or  factory.  Too  often  in  pre-war  times  he 
was  unduly  influenced  by  an  invitation  from  some 
small  industrial  center  to  locate  there,  on  the 
assurance  that  his  plant  would  be  free  of  tax 
burden  for  a  specified  number  of  years.  As  an  added 
inducement  the  cost  of  the  land  in  such  cases  was 
apt  to  be  very  low. 

"Swayed  by  these  and  other  minor  consider- 
ations, the  manufacturer  would  buy  a  site  and 
build  in  this  vicinity  to  find,  too  late,  that  his 
factory,  finished  and  in  operation,  was  not  properly 
placed  with  reference  to  raw  materials,  low  power 
rates,  good  water  supply,  suitable  labor  conditions 
and  within  reasonable  distance  from  a  market." 


*From  The  Textile  World,  July  23,  1921. 


(33) 


LEHIGH    AND    NEW    ENGLAND    RAILROAD    CO. 


/  Facilities  for  the  disposal  of  wastes  is  an 
important  factor  in  many  manufacturing 
processes.  At  some  locations  these  must  be 
taken  care  of  by  the  individual  manufacturer, 
in  others  sewage  systems  are  available,  in 
still  others,  refuse  and  waste  may  be  fed  into 
nearby  streams.  State  laws  frequently  have 
bearing  on  this  matter  and  should  be  con- 
sulted before  decision  is  reached. 

There  are  many  other  considerations  that 
should  be  investigated  and  weighed  in 
choosing  the  site  itself;/such  as  the  nature  of 
the  land,  ifs  contour  and  soil,  the  shape  of  the 
plot  and  similar  elements.  But  these  are  de- 
tails that  follow  the  more  important  factors 
dealing  with  location  in  general.  The  important 
thing  is  to  select  the  right  location  or  locality, 
the  site  itself  should  then  be  carefully  chosen. 

From  this  condensed  survey  of  the  principal 
factors  that  should  ordinarily  determine  the 
best  location  for  a  factory  or  manufacturing 
plant,  it  is  evident  that  the  manufacturer 
about  to  locate  his  industry,  or  the  manu- 


34 . 


LOCATING   THE    FACTORY 


facturer  who  is  considering  re-locating  his 
disadvantageous^  situated  plant,  must  care- 
fully contrast,  compare  and  consider  many 
different  factors  if  he  is  to  find  the  one  loca- 
tion that  is  the  very  best  one  for  him.  His 
investigation  of  all  suggested  sites  must  be 
drastically  thorough  and  his  final  decision 
must  rest  on  the  rock-ribbed  foundation  of 
Fact,  Truth  and  Correct  Principles. 

He  should  not  rely  wholly  on  the  reports  of 
people  or  organizations  interested  in  boosting 
some  particular  locality,  for  their  reports  must 
almost  necessarily  be  colored  by  their  enthu- 
siasm. The  Census  reports  and  some  of  the 
Departmental  reports  of  the  Federal  Govern- 
ment will  disclose  much  valuable  information, 
and  some  of  the  bulletins  issued  by  the  several 
States  may  be  of  assistance.  In  addition,  the 
counsel  of  someone  thoroughly  experienced  in 
the  problem  of  scientific  plant  and  factory 
location  should  be  called  upon.  In  this 
respect  the  service  offered  by  the  Lehigh  and 
New  England  Railroad  may  be  very  valuable. 

[351 


LOCATING 
THE  FACTORY 


A  STRATEGETIC  RAILROAD 


"The  development  of  any  manufacturing  business 
today  and  the  plans  for  growth  in  any  industry 
hinge  on  this  one  idea — specialization." 

— E.  H.  AHARA,  General  Superintendent, 
DODGE  MANUFACTURING  COMPANY. 

IN  effect,  the  Lehigh  and  New  England 
Railroad  is  a  large  belt-line  or  connecting 
railroad  which  crosses  and  connects  with 
all  the  principal  trunk-line  railways  in  the 
eastern  part  of  the  United  States.  It  provides 
the  same  advantages  to  industries  located 
along  its  lines  as  the  belt-lines  around  cities 
provide  for  the  industries  situated  along  their 
tracks.  The  chief  difference  is  that  the  Lehigh 
and  New  England  Railroad  serves  a  larger 
territory. 

[36] 


LOCATING   THE    FACTORY 


It  extends  from  Nesquehoning  in  Carbon 
County,  Pennsylvania,  to  Campbell  Hall  in 
Orange  County,  New  York,  and  embraces  a 
district  rich  in  manufacture,  agriculture  and 
natural  resources.  It  forms  a  gateway  to  the 
rich  New  England  factory  district,  and  gives 
ready  access  to  all  the  adjacent  Atlantic 
seaports  for  ocean-bound  or  canal-bound 
traffic.  It  taps  the  anthracite  coal  fields,  the 
Portland  cement  district  of  the  Eastern 
Pennsylvania,  and  traverses  a  section  of  the 
country  rich  in  slate,  limestone  and  many 
other  raw  materials  of  great  importance  to 
many  different  industries. 

It  should  be  remembered  that  "a  big 
majority  of  our  industries  today  are  included 
in  an  area  bounded  by  lines  connecting 
Portland,  Maine,  Milwaukee,  Wisconsin, 
St.  Louis,  Missouri  and  Baltimore,  Maryland. 
This  area  comprises  about  one-twelfth  of  the 
total  area  of  the  United  States  and  about ) 
one-half  of  its  population."  And  although 
location  along  the  lines  of  the  Lehigh  and  New 

[371 


LEHIGH   AND    NEW    ENGLAND    RAILROAD   CO. 

England  Railroad  is  not  the  best  for  every 
form  of  industry,  it  is  an  excellent  location 
for  many  different  enterprises. 

The  Lehigh  and  New  England  Railroad 
knows  that  its  prosperity  depends  upon  the 
prosperity  of  the  industries  it  serves.  Conse- 
quently, its  officers  are  interested  in  having 
only  those  industries  locate  along  its  lines 
who  will  be  best  located  when  located  there. 
To  this  end  this  railroad  places  at  the 
disposal  of  the  manufacturer  who  wishes  to 
thoroughly  investigate  all  localities  that  may 
prove  desirable,  its  full  facilities  for  the  anal- 
ysis of  factory  and  plant  locations. 

Data  and  records  of  great  value,  many  of 
which  the  average  manufacturer  would  not 
be  in  position  to  consult,  are  accessible  to  the 
Lehigh  and  New  England  Railroad.  Its 
research  work  and  reports  are  made  in  the 
interest  of  the  manufacturer,  impartially 
and  comprehensively,  in  the  same  way  the 
manufacturer  himself,  or  his  engineering 
specialist,  would  make  them.  This  contact 

[38] 


LOCATING    THE    FACTORY 


with  factors  and  figures  in  which  the  manu- 
facturer considering  factory  or  plant  location 
or  re-location  is  intimately  concerned,  is 
offered  to  those  interested  without  cost  or 
obligation. 

A  resume  of  the  scope,  importance  and 
value  of  this  service  will  be  furnished  on 
request. 

Traffic  Department 

LEHIGH  AND  NEW  ENGLAND 

RAILROAD  COMPANY 

GENERAL    OFFICES 

BETHLEHEM,  PENNSYLVANIA 


[39] 


